Russia was not able to pay back its debt

Reasons for the crisis
The crisis happened because Russia was not able to pay back its debt. If one ruble could value in more units of foreign currency of the countries to which it owes, then paying back would be easier.
The Russian stock, bond and currency markets collapse as a result of fears for a ruble devaluation and a default on domestic debt. These fears had arisen during the previous months due to ongoing interest rate rises, capital outflows and the corresponding erosion of investor confidence in emerging markets. Annual yields on ruble-denominated bonds rise to more than 200%. Furthermore, the stock market is closed down for 35 minutes when stock prices fall sharply. Stocks have lost more than 75% of their value since the beginning of the year
The government announces a set of emergency measures in order to prevent a further escalation of the crisis:
• A significant devaluation of the ruble; the bounds of the corridor in which the ruble is allowed to fluctuate are widened from 5.27-7.13 to 6.00-9.50 ruble to the US Dollar;
• A default on short-term Treasury Bills known as GKOs, as well as longer-dated ruble denominated bonds named OFZs;
• A 90-day moratorium on payments by commercial banks to foreign creditors
The Russian Central Bank’s decides to remove the currency corridor and makes the ruble a freely floating currency. The ruble soon starts to depreciate sharply; in 3 weeks the currency loses two thirds of its value. The strong depreciation results in sharp price increases. Inflation rises to 27.6% in 1998 and 85.7% in 1999. As a result of food price increases, social unrest grows and citizens start to demonstrate in various cities.
he ruble rate fell threefold, overnight from 6 to the dollar to 21 by early September. Inflation soared to over 80 percent and the Central Bank's attempt to stabilize the economy using a fixed exchange rate between 1994 and 1998 ended in complete failure.
1.Covered bonds are secured senior debt issued by …
Banks
Companies
Stocks
2. Covered bonds help American banks for…
free up capital for other financial activities
to remove the currency corridor
make freely floating currency
3. who became the first bank issuing dollar-based covered bonds.
Bank of America
4 These bonds obtain legislative support which makes the instrument bankruptcy remote.
Legislative covered bonds
Contractual covered bonds
Municipal
5 These bonds obtain bankruptcy remoteness through contractual features
Legislative covered bonds
Contractual covered bonds
Municipal
6. Covered bonds were created in
Prussia
USA
EUROPE
7. What is the difference between covered and corporate bonds
Interest
 recourse to a pool of assets that secures or "covers" the bond if the issuer (usually a financial institution) becomes insolvent.
 payments have to be made when due according to the original schedule
8. What are the three major redemption regimes for covered bondt5y
Hard-bullet ,Soft-bulleth, Conditional pass-through
Hard-bullet ,Soft-bulleth comprehensive
9. The Covered Bond Label Foundation (CBLF
grants quality labels and is a response to a market-wide request for improved standards and increased transparency in the European covered bond market
 is responsible for collecting and publishing complete and up-to-date information on issuing activities and volumes outstanding of covered bonds in all market segments
discusses topics such as conventions on trading standards and the market-making process
10. one major advantage to a covered bond is
that the debt and the underlying asset pool remain on the issuer's financials, and issuers must ensure that the pool consistently backs the covered bond
 prematurely paid debt must be replaced in the pool
Because of non-performing loan